Business Decision as Moral Quandary

Business Decision as Moral Quandary

Mike Herschel

Sunday, September 12, 2010

Business Decision as Moral Quandary

            In order to provide the reader with a template for decision making, the author will discuss Lawrence Kohlberg’s Six Stages of Moral Development and address a hypothetical business decision making process: a catering company faced with a decision to cancel Health Care Benefits for all or lay off half of the firm’s employees. The questions to be answered are: what should be done and why should one do it.

            Mr. Kohlberg is a moral philosopher with a great deal of study in the moral development of children; his ethical theories are very well documented and sustained by independent review from world-class peer review. The conclusions made are from studies of children and adults as they progressed through consecutive and very definitive stages of moral development: how do we go to understanding Right, Wrong, and ideas of what Justice looks like. The six stages below are three headings: premoral or preconventional stage, conventional morality, and interpersonal conformity.

            The premoral or preconventional stage is marked by actions motivated by the expectation of pain or pleasure and is a behavior borne of an understanding of the immediate consequences of an action being good or bad or of punishment and obedience (Aggelia, unknown). A good employer, as an example, is one that does not bounce paychecks; as the threat of retaliation from legal sources is a heavy threat indeed. The second phase is an understanding of the instrumental exchange one learns when confronted with choices that are understood to relay a reciprocate action (Aggelia, unknown). If ones child ‘eats (their) vegetables’ then they get a reward, yes? If no, then perhaps, it’s off to bed with no dessert. As adults this learning experience can manifest itself as a right action consisting of an instrumental exchange to satisfy the ego and our hypothetical employer may or may not consider staff as value in ratio to their utility.

            The moral conditions that heighten (or degrade) our sense of ability to accept the conventional morality (or the rules and regulations) of one’s peer group is called into play when one can see people associated with doing something, wearing something, or saying something and it is just easier to ‘go along to get along:’ retribution is collective, individual vengeance not allowed, and forgiveness is preferable to revenge (Tigger, unknown). Interpersonal Conformity is also know by punishment metered out is a deterrent and the failure to punish is unfair (Aggelia, unknown).  Our business owner would not have to look very far for the visage of an armed Treasury agent unrelentingly pursuing unpaid taxes to make even the strong of heart quake in fear. For our small business owner, the threat of fines (or taxes) from the federal government would make clear the decision to address the cost of employees health benefits could not be put off. A healthy respect for law and order, at the next stage of development, is a learned responsibility to defend social and institutional authority (Tigger, unknown). We observe and take to heart the responsibility we have to others: ‘paying a debt to society’ or ‘a day’s pay for a day’s work.’ Figures in authority are rarely questioned (Aggelia, unknown). The owner of our business in question would feel the very real pain of letting down his/her employees but still understand the responsibility to their enterprise and one’s personal family and be willing to make tough choices in a hierarchy of reasoned priorities. (Ed. Note: in between stages five and six, is a noteworthy level very well documented and exemplified by the 1960’s hippie sub-culture, whereas deliberate disdain for law and order was seen as arbitrary and relative  (Aggelia, unknown). Children and college students had not yet discovered universal ethical principles and had, instead, adopted hedonistic ideas  (Aggelia, unknown) of ‘if it feels good do it’ and ‘do your own thing’ carried disrespect for authority to new heights; those same hippies have grown up and are running our country now. Please, forgive the digression: it is only a brief side-bar to the theme.)

            At stage five of development, people learn that the moral standards of the previous stage of their life are not held hostage to a firm set of rules but are subject to social contracts and a prior set of rights (Tigger, unknown). Or put another way; moral actions are not incumbent upon a checklist of rules but come from the application of abstract, universal moral principles. By now, young people have become adults and realize that pre-existing and inalienable rights existed before common law and must be protected by society. Retributive penalty is neither cogent nor just, because it does not support the rights and wellbeing of the individual. Right action needs to be clear in terms of general human rights and in terms of principles that have been seriously examined and agreed upon by the whole culture (Aggelia, unknown): e.g. the U.S. Constitution. The moral lesson our business owner would lean upon is this; just because the letter of contract law, employment code, or the IRS says I must absorb the cost of insuring the company as per the new Health Care rules does not mean I cannot mitigate as I need to save my business. Universal ethical principles, at the next level, transcend stage four truisms and act upon universal principles that are based upon the quality of worth of all humans (Tigger, unknown). Meaning, in practice: people are never means to an end, but are ends in themselves because having rights means more than an individual’s liberty. Otherwise this may be spoken to as the Golden Rule prototype (Aggelia, unknown). The small business owner may very well seek to transcend the laws he/she may feel disposed to adhere to, in favor of mitigating the circumstance. For the pedestrian, inherent understanding is; if the government can take them away, one does not really have a right.

            If it were me in the shoes of the hypothetical, small business owner and felt compelled to either let go half of my employees and keep benefits for the remainder or keep everyone but without any health care for any, I would find a way to mitigate. First I would tell everyone the issue and throw light upon the problem. Then query the staff, one by one, to find out if any are double-covered by a spouse or significant other, anyone still living at home or young and healthy enough to be able to take out a far less expensive, high deductible plan, or voluntarily take a benefit cut in exchange for a salary increase. I would seek to change the parameters of the fight to a playing field where I could win without sacrificing the integrity my family counts on from me and still retain the confidence of my employees.


Aggelia. (unknown). Implications for Theology. Retrieved July 26, 2010, from KOHLBERG’S            STAGES OF MORAL DEVELOPMENT:

Tigger. (unknown). Moral Development . Retrieved July 25, 2010, from Kohlberg’s Theory of Moral Development and Education: